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Storytelling In The News: #76

The story of data, information and knowledge: airlines

March 2, 2004

The role of story in understanding the difference between data, information and knowledge is illustrated in a story about the airline industry in the Washington Post on February 29. The question at hand is why are the upstart new airlines flourishing, while the established airlines are all in various degrees of difficulty? How can the upstarts make money while offering fares that are 40 to 70 percent lower than the established airlines? The article implies that the answer lies in doing the math ("The Math Flies") but the reality is the answer lies not in the math, but in the lens of a story through which we understand the math.

Data - "just the math, please!"

The article has an intriguing set of ten subtitles, comprising entirely figures:

* 1.3 million
* 84.6
* 2%
* 40%
* 23 and 0
* $215,000 a year
* $9.99 an hour
* 0
* $21 an hour
* 1

One cannot make any sense of these figures by themselves, because they are merely data. From this math alone, we can't see their connetion to anything at all, let alone the airline industry.

Let's have some information!

As we read the article, we acquire some information about the relationship of the data to the airline industry.

* 1.3 million is the potential airline passengers that low-cost carriers look for in a city
* 84.6 is the number of employees per aircraft at Southwest Airlines.
* 2% is the percentage of ticket sales that JetBlue Airways makes through traditional travel agents.
* 40% is the percentage of American Airlines passengers who connect to another flight to reach their final destination.
* 23 and 0 is the number of U.S. cities and foreign countries that JetBlue Airways, the nation's 11th-largest carrier, serves. It's a far cry from the 109 cities and 23 foreign countries reached by the nation's second-largest airline, United. And even those large amounts exclude United's code-sharing alliances with other airlines.
* $215,000 a year is the average salary for a captain at Delta Air Lines.
* $9.99 an hour is the amount of compensation going to benefits in the airline industry.
* 0 is the number of downtown ticket offices low-cost carriers such as Southwest, JetBlue and AirTran operate.
* $21 an hour is the average base pay, excluding benefits, of one of US Airways' 1,930 telephone reservation agents.
* 1 is number of types of planes JetBlue flies

But even with this information, we are still not very much further forward in understanding the airline industry.

We acquire knowledge, once we understand the story

It is only when we get to the story behind the numbers that we start to understand what is going on.

The story of 1.3 million potential annual airline passengers is that this is what a city must have before a low-cost carrier will even consider it as a potential destination. The low-cost carriers have no plans to take their large jets into such cities as Ithaca, N.Y., or Lubbock, Tex. "All these small communities want low-cost carriers, but they're more likely to get a moon launch than service from one of these airlines," said an expert.

It's Southwest Airlines that has 84.6 employees per aircraft. That's 's the figure the industry uses to measure employee productivity. Compare that number with 116 employees per plane at United Airlines, a number the airline achieved last year during its bankruptcy reorganization. The United number had been 173 in 2002. The United reduction resulted in a savings of about $2 billion and boosted productivity by 33 percent.

While JetBlue Airways makes 2 percent of its ticket sales through traditional travel agents. travel agents sell 61.2 percent of US Airways tickets. The number is about 50 percent for American Airlines. It costs an airline only about 1 percent of the ticket price to sell it online. While legacy carriers have drastically reduced the commissions they pay travel agents, selling the traditional way remains the most costly method -- between 7 and 9 percent of ticket value.

The percentage of American Airlines passengers who connect to another flight to reach their final destination - 40 percent - is significant because routes that include connections are more expensive than direct, nonstop flights. Southwest Airlines calculates that only 10 percent of its passengers connect to another flight to get where they're going, in large part because the airline focuses on flights to and from destination cities. In essence, the burden for any onward travel is on the passenger to arrange, not the low-cost carrier.

And so on, with the rest of the data.

In each instance, it's the story behind the numbers that enables us to understand them, and so acquire knowledge about the airline industry - why the sector is where it is, and where it is likely to be going. These aren't traditional stories with a hero, a plot, a beginning, a middle an ending, and a turning point. These are knowledge-sharing stories that do something else: they show a set of causal connections of events happening in time. These stories are the unheralded workhorses of the business world - mundane, bland and uninteresting - except to someone trying to understand the subject of the story - in this case, the airline industry..

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